Continuity Of Mega Projects To Drive Economic Growth, Job Creation -- Experts

By Abdul Hamid A Rahman and Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Oct 17 (Bernama) -- The continuity of major infrastructure projects under Prime Minister Datuk Seri Anwar Ibrahim's MADANI government is poised to generate substantial spillover effects across the economy, fostering job creation, attracting investments, and enhancing connectivity, according to experts.

Mega projects such as the East Coast Rail Link (ECRL), Pan Borneo Highway, and the revival of Bandar Malaysia signal economic stability and confidence, attracting both domestic and foreign investment. 

Developments like Bandar Malaysia are expected to stimulate private sector involvement, particularly in real estate, financial services, and technology sectors, while the establishment of infrastructure hubs, including key transport links like the Mass Rapid Transit 3 (MRT 3) and ECRL, are expected to further encourage private investment, particularly in logistics, manufacturing, and tourism.

Job Creation and Enhance Connectivity

Speaking to Bernama recently, professor Tan Peck Leong, a senior lecturer at Universiti Teknologi MARA’s Arshad Ayub Graduate Business School, said the mega projects, if executed with a clear vision, have the potential to transform Malaysia's economic landscape.

He said one of the most evident spillover effects of the mega projects is job creation as these projects involved the infrastructure, transport, and digital sectors which would create both direct and indirect employment opportunities, hence, benefiting local communities. 

In terms of employment, he said as these mega projects generally employ both local and foreign skilled workers, they would provide opportunities for upskilling and increasing the nation's skilled workforce. 

On connectivity, Tan said the Pan Borneo Highway, for instance, is expected to boost regional connectivity in Sabah and Sarawak, providing development in rural areas and supporting local businesses.

Likening it to the North-South Expressway which was completed in 1986, he said the Pan Borneo Highway will bring the same connectivity to Sabah and Sarawak and unlock economic opportunities for diverse communities.

Tourism and Services Sector Expansion

Large-scale infrastructure projects such as Kuala Lumpur International Airport (KLIA) and its subsequent expansion with KLIA2 have significantly impacted Malaysia's tourism and services sector, positioning the country as a key tourism hub in Southeast Asia. 

Tan said the airport’s strategic location and enhanced capacity have established Malaysia as a regional tourism hub, drawing millions of international tourists and stimulating the domestic economy.

“The airports' capacity to attract tourists from developed countries to Malaysia brings considerable positive impact by stimulating local tourism, increasing spending in the domestic economy, and boosting foreign exchange reserves," he said.

He added that the construction of the ECRL and other transport links could similarly open up previously untapped regions for tourism, further boosting economic activity.

Challenges and Cost Management

Mega projects often face the risk of cost overruns and delays, which can diminish their economic returns. 

Tan noted that while highways and transport systems are beneficial, they can sometimes impose additional costs on the public, such as toll charges, which may increase the cost of living for Malaysians.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid emphasised the need for strict governance and key performance indicators to monitor the long-term success of these projects. 

“The government should track the proliferation of green technology and reductions in carbon emissions, particularly in transport projects like the MRT and ECRL.

“For example, upon completion, what will be the public transport ridership, the material reduction in road congestion, and the improvement in air quality? he said.

Long-Term Economic Impact

Despite the positive economic spillover effects from the mega projects, Williams Business Consultancy Sdn Bhd founder and director Geoffrey Williams pointed out that success of these projects hinges on timely completion and budget management. 

“The continuity of these projects is crucial, but it is equally important to reassess them periodically to ensure they remain viable and deliver their intended economic benefits,” said the economist.

The government has allocated RM393.8 billion in Budget 2024, in which RM303.8 billion was earmarked for operating expenditure and RM90 billion for development expenditure, with RM2 billion in contingency savings.

-- BERNAMA